5.10 Suppose the individual's utility function for three goods, Xu X2, and Xs, is separable; that is,

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5.10 Suppose the individual's utility function for three goods, Xu X2, and Xs, is "separable"; that is, assume that U(XU X« X3) = Ul(X1) + £/2(X2) + l/s(Xs)

andU'i>0 U'-<0 for i = 1, 2, or 3.

Show that

a. None of the goods can be inferior;

b. dXi/dPi must be < 0.

In the Chapter 6 extensions we examine this separable utility case in more detail.

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